CASES [G.R. No. 81311 June 30, 1988] Kapatiran ng mga Naglilingo! "a #ama$alaan ng #ilipina", %n&. '". (an [G.R. No. 81311 June 30, 1988]
nullify Executive Order No. 273 issued by the the resident of the )a&t"* These four (4) petitions seek to nullify hilippines! "nd #hich "$ended cert"in sections of the N"tion"l %ntern"l &evenue 'ode "nd "dopted the v"lue"dded t"x! for bein unconstitution"l in th"t its en"ct$ent is not "lleedly #ithin the po#ers of the resident* th"t the +,T is oppressive! discri$in"tory! reressive! "nd viol"tes the due process "nd e-u"l protection cl"uses "nd other provisions provisions of the /07 'onstitution. 'onstitution. The +,T is " t"x levied on " #ide r"ne of oods "nd services. %t is " t"x on the v"lue! "dded by every seller! #ith "re"te ross "nnu"l s"les of "rticles "nd1or services! exceedin 2!.! to his purch"se of oods "nd services! unless exe$pt. +,T is co$puted "t the r"te of or of the ross sellin price of oods or ross receipts re"lied fro$ the s"le of services. The +,T is s"id to h"ve eli$in"ted privilee t"xes! $ultiple r"ted s"les t"x on $"nuf"cturers "nd producers! "dv"nce s"les t"x! "nd co$pens"tin t"x on i$port"tions. The fr"$ers of EO 273 th"t it is princip"lly "i$ed to r"tion"lie the syste$ s yste$ of t"xin oods "nd services* si$plify t"x "d$inistr"tion* "nd $"ke the t"x syste$ $ore e-uit"ble! to en"ble the country to "tt"in econo$ic recovery. The +,T is not entirely ne#. %t #"s "lre"dy in force! in " $odified for$! before EO 273 #"s issued. ,s pointed out by the 5olicitor 6ener"l! the hilippine s"les t"x syste$! prior to the issu"nce of EO 273! #"s essenti"lly " sinle st"e v"lue "dded t"x syste$ co$puted under the cost subtr"ction $ethod or cost dedu deduct ctio ion n $eth $ethod od "nd "nd #"s #"s i$po i$pose sed d only only on ori oriin in"l "l s"le s"le!! b"rt b"rter er or exch exch"n "ne e of "rti "rticl cles es by $"nuf"cturers! producers! or i$porters. 5ubse-uent s"les of such "rticles #ere not sub8ect to s"les t"x. 9o#ever! #ith the issu"nce of : // on 3 October /0;! " 3 t"x #"s i$posed on " second s"le! #hich #"s reduced to .; upon the issu"nce of : 2< on 3 :ece$ber /0;! to t"ke effect ="nu"ry /0<. /0<. &educed &educed s"les t"xes t"xes #ere i$posed i$posed not only on the second s"le! but on every subs subse-uen e-uentt s"le! "s #ell. EO 273 $erely incre"sed the +,T on every s"le to ! unless eror"ted or exe$pt. unconstitution"l %""ue* >hether or not EO 273 is unconstitution"l th"t EO 273 #"s issued c"priciously "nd #hi$sic"lly #hi$sic"lly or in "n +el!* No. etitioners h"ve f"iled to sho# th"t "rbitr"ry or despotic $"nner by re"son of p"ssion or person"l hostility. %t "ppe"rs th"t " co$prehensive study of the +,T h"d been extensively discussed by this fr"$ers "nd other overn$ent "encies involved in its i$ple$ent"tion! even under the p"st "d$inistr"tion. ,s the 5olicitor 6ener"l correctly s"ted. The sinin of E.O. 273 #"s $erely the l"st st"e in the exercise of her leisl"tive po#ers. The leisl"tive process st"rted lon before before the sinin #hen #hen the d"t" #ere "thered! propos"ls propos"ls #ere #eihed "nd the fin"l #ordins of the $e"sure #ere dr"fted! revised "nd fin"lied. 'ert"inly! it c"nnot be s"id th"t the resident $"de " 8u$p! so to spe"k! on the 'onress! t#o d"ys d" ys before it convened. Next! the petitioners petitioners cl"i$ th"t EO 273 is oppressive! oppressive! discri$in"tory! discri$in"tory! un8ust "nd reressive. reressive. The petitioners "ssertions in this re"rd "re not supported by f"cts "nd circu$st"nces to #"rr"nt their conclusions. They h"ve f"iled to "de-u"tely sho# th"t the +,T is oppressive! discri$in"tory or un8ust. etitioners $erely rely upon ne#sp"per "rticles #hich "re "ctu"lly he"rs"y "nd h"ve evidenti"ry v"lue. To 8ustify the nullific"tion of " l"#! there $ust be " cle"r "nd une-uivoc"l bre"ch of the 'onstitution! not " doubtful "nd "ru$ent"tive "ru$ent"tive i$plic"tion.
,s the 'ourt sees it! EO 273 s"tisfies "ll the re-uire$ents of " v"lid t"x. %t is unifor$. , t"x is considered unifor$ #hen it oper"tes #ith the s"$e force "nd effect in every pl"ce #here the sub8ect $"y be found. The s"les t"x "dopted in EO 273 is "pplied si$il"rly on "ll oods "nd services sold to the public! #hich "re not exe$pt! "t the const"nt r"te of or . The disputed s"les t"x is "lso e-uit"ble. %t is i$posed only on s"les of oods or services by persons en"e in business #ith "n "re"te ross "nnu"l s"les exceedin 2!.. 5$"ll corner s"ris"ri stores "re conse-uently exe$pt fro$ its "pplic"tion. ?ike#ise exe$pt fro$ the t"x "re s"les of f"r$ "nd $"rine products! sp"red "s they the y "re fro$ the incidence of the +,T +,T! "re expected to be rel"tively lo#er "nd #ithin the re"ch of the ener"l public. The 'ourt 'ourt like#i like#ise se finds finds no $erit $erit in the conten contentio tion n of the the petiti petition oner er %nter %nter"te "ted d 'usto$ 'usto$ss @roker @rokerss ,ssoci"tion of the hilippines th"t EO 273! $ore p"rticul"rly the ne# 5ec. 3 (r) of the N"tion"l %ntern"l &evenue 'ode! unduly discri$in"tes ""inst custo$s brokers. ,t "ny r"te! the distinction of the custo$s brokers fro$ the other profession"ls #ho "re sub8ect to occup"tion t"x under the ?oc"l T"x 'ode is b"sed upon $"teri"l differences! in th"t the "ctivities of custo$s brokers (like those of stock! re"l est"te "nd i$$ir"tion brokers) p"rt"ke $ore of " business! r"ther th"n " profession "nd #ere thus sub8ected to the percent"e t"x under 5ec. 74 of the N"tion"l %ntern"l &evenue 'ode prior to its "$end$ent by EO 273. EO 273 "bolished the percent"e t"x "nd repl"ced repl"ce d it #ith the t he +,T +,T. AAKA-A GR/ #AR( #AR( %S( 2. ER%(A (+E 2A( 2A( RE)/R A4 5RA 93367 %S EN(%RE E N(%RE C/NS(%((%/NA NA(RE /) 2A(
The +,T is " t"x on spendin or consu$ption. %t is levied on the s"le! b"rter! exch"ne or le"se of oods or properties "nd services. @ein "n indirect t"x on expenditure! the seller of oods or services $"y p"ss on the "$ount " $ount of t"x p"id to the buyer! bu yer! #ith the seller "ctin $erely "s " t"x collector. collector. The burden of +,T is intended to f"ll on the i$$edi"te buyers "nd ulti$"tely! the endconsu$ers. +%S(/R%CA #ERS#EC(%2E
%n the hilippines! the v"lue"dded syste$ of s"les t"x"tion h"s lon been in existence! "lbeit in " different $ode. rior to /70! the syste$ #"s " sinlest"e t"x co$puted under the cost deduction $ethod $ethod "nd #"s p"y"bl p"y"blee only only by the orii oriin"l n"l seller sellers. s. The The sinle sinlest st"e "e sys syste$ te$ #"s sub subsese-uen uently tly $odified! "nd " $ixture of the cost deduction $ethod "nd t"x credit $ethod #"s used to deter$ine the v"lue"dded t"x p"y"ble. Ander the t"x credit $ethod! "n entity c"n credit ""inst or subtr"ct fro$ the +,T ch"red on its s"les or outputs the +,T p"id on its purch"ses! inputs "nd i$ports. %t #"s only in /07! #hen resident 'or"on '. ,-uino issued Executive Order No. 273! th"t the +,T syste$ #"s r"tion"lied by i$posin " $ultist"e t"x r"te of or on "ll s"les usin the t"x credit $ethod. E.O. No. 273 #"s follo#ed by &.,. No. 77< or the Exp"nded +,T +,T ?"#! ?"#! &.,. No. 024 or the %$proved +,T ?"#! &.,. No. 0424 or the T"x &efor$ ,ct of //7! "nd fin"lly! the presently bele"uered &.,. No. /337! "lso referred to by respondents "s the +,T &efor$ ,ct. ENR/E- % -/C(R%NE
Ander the enrolled bill doctrine! the sinin of " bill by the 5pe"ker of the 9ouse "nd the 5en"te resident "nd the certific"tion of the 5ecret"ries of both 9ouses of 'onress th"t it #"s p"ssed "re conclusive of its due en"ct$ent. C/R(S GENERA -EN%E- (+E #/4ER (/ %N%RE %N(/ C/NGRESS )A%RE (/ C/# 4%(+ %(S /4N RES
The c"ses! both here "nd "bro"d! in v"ryin for$s of expression! "ll deny to the courts the po#er to in-uire into "lle"tions th"t! in en"ctin " l"#! " 9ouse of 'onress f"iled to co$ply #ith its o#n r ules! in the "bsence of sho#in th"t there #"s " viol"tion of " constitution"l provision or the rihts of priv"te individu"ls. %n Os$eB" v. end"tun! it #"s heldC ,t "ny r"te! courts h"ve decl"red th"t Dthe rules "dopted by deliber"tive bodies "re sub8ect to revoc"tion! $odific"tion or #"iver "t the ple"sure of the body "doptin the$.D ,nd it h"s been s"id th"t "rli"$ent"ry rules "re $erely procedur"l! "nd #ith their observ"nce! the courts h"ve no concern. They $"y be #"ived or disre"rded by the leisl"tive body. The foreoin decl"r"tion is ex"ctly in point #ith the present c"ses! #here petitioners "llee irreul"rities co$$itted by the conference co$$ittee in introducin ch"nes or deletin provisions in the 9ouse "nd 5en"te bills. One of the $ost b"sic "nd inherent po#er of the leisl"ture is the po#er to for$ul"te rules for its proceedins "nd the discipline of its $e$bers. 'onress is the best 8ude of ho# it should conduct its o#n business expeditiously "nd in the $ost orderly $"nner. %t is "lso the sole concern of 'onress to instill discipline "$on the $e$bers of its conference co$$ittee if it believes th"t s"id $e$bers viol"ted "ny of its rules of proceedins. Even the exp"nded 8urisdiction of the 5upre$e 'ourt c"nnot "pply to -uestions re"rdin only the intern"l oper"tion of 'onress. %CAERA C/N)ERENCE C/%((EE 5CC7
,ll the ch"nes or $odific"tions $"de by the @ic"$er"l 'onference 'o$$ittee #ere er$"ne to sub8ects of the provisions referred to it for reconcili"tion. 5uch bein the c"se! the 'ourt does not see "ny r"ve "buse of discretion "$ountin to l"ck or excess of 8urisdiction co$$itted by the @ic"$er"l 'onference 'o$$ittee. The 'ourt reconied the lonst"ndin leisl"tive pr"ctice of ivin s"id conference co$$ittee "$ple l"titude for co$pro$isin differences bet#een the 5en"te "nd the 9ouse. Thus! in the Tolentino c"se! it #"s held th"tC . . . it is #ithin the po#er of " conference co$$ittee to include in its report "n entirely ne# provision th"t is not found either in the 9ouse bill or in the 5en"te bill. %f the co$$ittee c"n propose "n "$end$ent consistin of one or t#o provisions! there is no re"son #hy it c"nnot propose sever"l provisions! collectively considered "s "n "$end$ent in the n"ture of " substitute! so lon "s such "$end$ent is er$"ne to the sub8ect of the bills before the co$$ittee. ,fter "ll! its report #"s not fin"l but needed the "pprov"l of both houses of 'onress to beco$e v"lid "s "n "ct of the leisl"tive dep"rt$ent. The ch"re th"t in this c"se the 'onference 'o$$ittee "cted "s " third leisl"tive ch"$ber is thus #ithout "ny b"sis. :N/ AEN-EEN( RE; < N/( 2%/A(E- CC
,rticle +%! 5ec. 2< (2) of the 'onstitution! st"tesC No bill p"ssed by either 9ouse sh"ll beco$e " l"# unless it h"s p"ssed three re"dins on sep"r"te d"ys! "nd printed copies thereof in its fin"l for$ h"ve been distributed to its e$bers three d"ys before its p"ss"e! except #hen the resident certifies to the necessity of its i$$edi"te en"ct$ent to $eet " public c"l"$ity or e$erency. Apon the l"st re"din of " bill! no "$end$ent thereto sh"ll be "llo#ed! "nd the vote thereon sh"ll be t"ken i$$edi"tely there"fter! "nd the ye"s "nd n"ys entered in the =ourn"l.
There is no re"son for re-uirin th"t the 'o$$itteeDs &eport in these c"ses $ust h"ve underone three re"dins in e"ch of the t#o houses. %f th"t be the c"se! there #ould be no end to neoti"tion since e"ch house $"y seek $odific"tion of the co$pro$ise bill. . . . E=(EN( /) :N/ AEN-EN( RE;
The FNo ,$end$ent &uleG $ust be construed "s referrin only to bills introduced for the first ti$e in either house of 'onress! not to the conference co$$ittee report.
%S 4+%C+ S( E=CS%2E /R%G%NA(E %N (+E +/SE
,ll "ppropri"tion! revenue or t"riff bills! bills "uthoriin incre"se of the public debt! bills of loc"l "pplic"tion! "nd priv"te bills sh"ll oriin"te exclusively in the 9ouse of &epresent"tives but the 5en"te $"y propose or concur #ith "$end$ents. %n the present c"ses! petitioners "d$it th"t it #"s indeed 9ouse @ill Nos. 3;;; "nd 37; th"t initi"ted the $ove for "$endin provisions of the N%&' de"lin $"inly #ith the v"lue"dded t"x. Apon tr"ns$itt"l of s"id 9ouse bills to the 5en"te! the 5en"te c"$e out #ith 5en"te @ill No. /; proposin "$end$ents not only to N%&' provisions on the v"lue"dded t"x but "lso "$end$ents to N%&' provisions on other kinds of t"xes. %s the introduction by the 5en"te of provisions not de"lin directly #ith the v"lue"dded t"x! #hich is the only kind of t"x bein "$ended in the 9ouse bills! still #ithin the purvie# of the constitution"l provision "uthoriin the 5en"te to propose or concur #ith "$end$ents to " revenue bill th"t oriin"ted fro$ the 9ouseH IE5. %n the Tolentino c"seC F. . . To bein #ith! it is not the l"# J but the revenue bill J #hich is re-uired by the 'onstitution to oriin"te exclusively in the 9ouse of &epresent"tives. %t is i$port"nt to e$ph"sie this! bec"use " bill oriin"tin in the 9ouse $"y undero such extensive ch"nes in the 5en"te th"t the result $"y be " re#ritin of the #hole. . . . ,t this point! #h"t is i$port"nt to note is th"t! "s " result of the 5en"te "ction! " distinct bill $"y be produced. To insist th"t " revenue st"tute J "nd not only the bill #hich initi"ted the leisl"tive process cul$in"tin in the en"ct$ent of the l"# J $ust subst"nti"lly be the s"$e "s the 9ouse bill #ould be to deny the 5en"teDs po#er not only to concur #ith "$end$ents but "lso to propose "$end$ents. %t #ould be to viol"te the coe-u"lity of leisl"tive po#er of the t#o houses of 'onress "nd in f"ct $"ke the 9ouse superior to the 5en"te.G %ndeed! #h"t the 'onstitution si$ply $e"ns is th"t the initi"tive for filin revenue! t"riff or t"x bills! bills "uthoriin "n incre"se of the public debt! priv"te bills "nd bills of loc"l "pplic"tion $ust co$e fro$ the 9ouse of &epresent"tives on the theory th"t! elected "s they "re fro$ the districts! the $e$bers of the 9ouse c"n be expected to be $ore sensitive to the loc"l needs "nd proble$s. On the other h"nd! the sen"tors! #ho "re elected "t l"re! "re expected to "ppro"ch the s"$e proble$s fro$ the n"tion"l perspective. @oth vie#s "re thereby $"de to be"r on the en"ct$ent of such l"#s. N/N>-EEGA(%/N /) EG%SA(%2E #/4ER
The principle of sep"r"tion of po#ers ord"ins th"t e"ch of the three re"t br"nches of overn$ent h"s exclusive coni"nce of "nd is supre$e in $"tters f"llin #ithin its o#n constitution"lly "lloc"ted sphere. , loic"l coroll"ry to the doctrine of sep"r"tion of po#ers is the principle of nondele"tion of po#ers! "s expressed in the ?"tin $"xi$C potest"s dele"t" non dele"ri potest #hich $e"ns #h"t h"s been dele"ted! c"nnot be dele"ted. This doctrine is b"sed on the ethic"l principle th"t such "s dele"ted
po#er constitutes not only " riht but " duty to be perfor$ed by the dele"te throuh the instru$ent"lity of his o#n 8ud$ent "nd not throuh the intervenin $ind of "nother. The po#ers #hich 'onress is prohibited fro$ dele"tin "re those #hich "re strictly! or inherently "nd exclusively! leisl"tive. urely leisl"tive po#er! #hich c"n never be dele"ted! h"s been described "s the "uthority to $"ke " co$plete l"# J co$plete "s to the ti$e #hen it sh"ll t"ke effect "nd "s to #ho$ it sh"ll be "pplic"ble J "nd to deter$ine the expediency of its en"ct$ent. Thus! the rule is th"t in order th"t " court $"y be 8ustified in holdin " st"tute unconstitution"l "s " dele"tion of leisl"tive po#er! it $ust "ppe"r th"t the po#er involved is purely leisl"tive in n"ture J th"t is! one "ppert"inin exclusively to the leisl"tive dep"rt$ent. %t is the n"ture of the po#er! "nd not the li"bility of its use or the $"nner of its exercise! #hich deter$ines the v"lidity of its dele"tion. E=CE#(%/NS*
() :ele"tion of t"riff po#ers to the resident under 5ection 20 (2) of ,rticle +% of the 'onstitution* (2) :ele"tion of e$erency po#ers to the resident under 5ection 23 (2) of ,rticle +% of the 'onstitution* (3) :ele"tion to the people "t l"re* (4) :ele"tion to loc"l overn$ents* "nd (;) :ele"tion to "d$inistr"tive bodies. %n every c"se of per$issible dele"tion! there $ust be " sho#in th"t the dele"tion itself is v"lid. %t is v"lid only if the l"# (") is co$plete in itself! settin forth therein the policy to be executed! c"rried out! or i$ple$ented by the dele"te* "nd (b) fixes " st"nd"rd J the li$its of #hich "re sufficiently deter$in"te "nd deter$in"ble J to #hich the dele"te $ust confor$ in the perfor$"nce of his functions. , sufficient st"nd"rd is one #hich defines leisl"tive policy! $"rks its li$its! $"ps out its bound"ries "nd specifies the public "ency to "pply it. N/ -EEGA(%/N /) EG%SA(%2E #/4ER (/ (+E #RES%-EN( %N (+%S CASE
%n the present c"se! the ch"llened section of &.,. No. /337 is the co$$on proviso in 5ections 4! ; "nd < #hich re"ds "s follo#sC Th"t the resident! upon the reco$$end"tion of the 5ecret"ry of Kin"nce! sh"ll! effective ="nu"ry ! 2
The c"se is not " dele"tion of leisl"tive po#er. %t is si$ply " dele"tion of "scert"in$ent of f"cts upon #hich enforce$ent "nd "d$inistr"tion of the incre"se r"te under the l"# is continent. The leisl"ture h"s $"de the oper"tion of the 2 r"te effective ="nu"ry ! 2
%n the present c"se! in $"kin his reco$$end"tion to the resident on the existence of either of the t#o conditions! the 5ecret"ry of Kin"nce is not "ctin "s the "lter eo of the resident or even her subordin"te. %n such inst"nce! he is not sub8ect to the po#er of control "nd direction of the resident. 9e is "ctin "s the "ent of the leisl"tive dep"rt$ent! to deter$ine "nd decl"re the event upon #hich its expressed #ill is to t"ke effect. The 5ecret"ry of Kin"nce beco$es the $e"ns or tool by #hich leisl"tive policy is deter$ined "nd i$ple$ented! considerin th"t he possesses "ll the f"cilities to "ther d"t" "nd infor$"tion "nd h"s " $uch bro"der perspective to properly ev"lu"te the$. 9is function is to "ther "nd coll"te st"tistic"l d"t" "nd other pertinent infor$"tion "nd verify if "ny of the t#o conditions l"id out by 'onress is present. 9is person"lity in such inst"nce is in re"lity but " pro8ection of th"t of 'onress. Thus! bein the "ent of 'onress "nd not of the resident! the resident c"nnot "lter or $odify or nullify! or set "side the findins of the 5ecret"ry of Kin"nce "nd to substitute the 8ud$ent of the for$er for th"t of the l"tter. N/ 2%/A(%/N /) #R%NC%#E /) RE#%CAN%S
,s to the "ru$ent of petitioners th"t dele"tin to the resident the leisl"tive po#er to t"x is contr"ry to the principle of republic"nis$! the s"$e deserves sc"nt consider"tion. 'onress did not dele"te the po#er to t"x but the $ere i$ple$ent"tion of the l"#. The intent "nd #ill to incre"se the +,T r"te to 2 c"$e fro$ 'onress "nd the t"sk of the resident is to si$ply execute the leisl"tive policy. Th"t 'onress chose to do so in such " $"nner is not #ithin the province of the 'ourt to in-uire into! its t"sk bein to interpret the l"#. NE4 (A= N/( /##RESS%2E
The principle of fisc"l "de-u"cy "s " ch"r"cteristic of " sound t"x syste$ #"s oriin"lly st"ted by ,d"$ 5$ith in his '"nons of T"x"tion (77<). %t si$ply $e"ns th"t sources of revenues $ust be "de-u"te to $eet overn$ent expenditures "nd their v"ri"tions. The dire need for revenue c"nnot be inored. Our country is in " -u"$ire of fin"nci"l #oe. :urin the @ic"$er"l 'onference 'o$$ittee he"rin! then Kin"nce 5ecret"ry urisi$" bluntly depicted the countryDs loo$y st"te of econo$ic "ff"irs. . . . policy $"tters "re not the concern of the 'ourt. 6overn$ent policy is #ithin the exclusive do$inion of the politic"l br"nches of the overn$ent. %t is not for this 'ourt to look into the #isdo$ or propriety of leisl"tive deter$in"tion. %ndeed! #hether "n en"ct$ent is #ise or un#ise! #hether it is b"sed on sound econo$ic theory! #hether it is the best $e"ns to "chieve the desired results! #hether! in short! the leisl"tive discretion #ithin its prescribed li$its should be exercised in " p"rticul"r $"nner "re $"tters for the 8ud$ent of the leisl"ture! "nd the serious conflict of opinions does not suffice to brin the$ #ithin the r"ne of 8udici"l coni"nce. N/ -E#R%2A(%/N /) #R/#ER( 4%(+/( -E #R/CESS
etitioners "rue th"t the input t"x p"rt"kes the n"ture of " property th"t $"y not be confisc"ted! "ppropri"ted! or li$ited #ithout due process of l"#. The input t"x is not " property or " property riht #ithin the constitution"l purvie# of the due process cl"use. , +,Treistered personDs entitle$ent to the credit"ble input t"x is " $ere st"tutory privilee. The distinction bet#een st"tutory privilees "nd vested rihts $ust be borne in $ind for persons h"ve no vested rihts in st"tutory privilees. The st"te $"y ch"ne or t"ke "#"y rihts! #hich #ere cre"ted by the l"# of the st"te! "lthouh it $"y not t"ke "#"y property! #hich #"s vested by virtue of such rihts. EA #R/(EC(%/N CASE
The e-u"l protection cl"use under the 'onstitution $e"ns th"t no person or cl"ss of persons sh"ll be deprived of the s"$e protection of l"#s #hich is en8oyed by other persons or other cl"sses in the s"$e pl"ce "nd in like circu$st"nces.G The po#er of the 5t"te to $"ke re"son"ble "nd n"tur"l cl"ssific"tions for the purposes of t"x"tion h"s lon been est"blished. >hether it rel"tes to the sub8ect of t"x"tion! the kind of property! the r"tes to be levied! or the "$ounts to be r"ised! the $ethods of "ssess$ent! v"lu"tion "nd collection! the 5t"teDs po#er is entitled to presu$ption of v"lidity. ,s " rule! the 8udici"ry #ill not interfere #ith such po#er "bsent " cle"r sho#in of unre"son"bleness! discri$in"tion! or "rbitr"riness. The e-u"l protection cl"use does not re-uire the univers"l "pplic"tion of the l"#s on "ll persons or thins #ithout distinction. This $iht in f"ct so$eti$es result in une-u"l protection. >h"t the cl"use re-uires is e-u"lity "$on e-u"ls "s deter$ined "ccordin to " v"lid cl"ssific"tion. @y cl"ssific"tion is $e"nt the roupin of persons or thins si$il"r to e"ch other in cert"in p"rticul"rs "nd different fro$ "ll others in these s"$e p"rticul"rs. N%)/R%( AN- E%(A%%( /) (A=A(%/N
The rule of t"x"tion sh"ll be unifor$ "nd e-uit"ble. The 'onress sh"ll evolve " proressive syste$ of t"x"tion. Anifor$ity in t"x"tion $e"ns th"t "ll t"x"ble "rticles or kinds of property of the s"$e cl"ss sh"ll be t"xed "t the s"$e r"te. :ifferent "rticles $"y be t"xed "t different "$ounts provided th"t the r"te is unifor$ on the s"$e cl"ss every#here #ith "ll people "t "ll ti$es. %n this c"se! the t"x l"# is unifor$ "s it provides " st"nd"rd r"te of or (or 2) on "ll oods "nd services. 5ections 4! ; "nd < of &.,. No. /337! "$endin 5ections
,side fro$ these! 'onress "lso incre"sed the inco$e t"x r"tes of corpor"tions! in order to distribute the burden of t"x"tion. :o$estic! forein! "nd nonresident corpor"tions "re no# sub8ect to " 3; inco$e t"x r"te! fro$ " previous 32. %ntercorpor"te dividends of nonresident forein corpor"tions "re still sub8ect to ; fin"l #ithholdin t"x but the t"x credit "llo#ed on the corpor"tionDs do$icile #"s incre"sed to 2. The hilippine ,$use$ent "nd 6"$in 'orpor"tion (,6'O&) is not exe$pt fro$ inco$e t"xes "ny$ore. Even the s"le by "n "rtist of his #orks or services perfor$ed for the production of such #orks #"s not sp"red. ,ll these #ere desined to e"se! "s #ell "s spre"d out! the burden of t"x"tion! #hich #ould other#ise rest l"rely on the consu$ers. #R/GRESS%2%( /) (A=A(%/N
roressive t"x"tion is built on the principle of the t"xp"yerDs "bility to p"y. T"x"tion is proressive #hen its r"te oes up dependin on the resources of the person "ffected. The +,T is "n "ntithesis of proressive t"x"tion. @y its very n"ture! it is reressive. The principle of proressive t"x"tion h"s no rel"tion #ith the +,T syste$ in"s$uch "s the +,T p"id by the consu$er or business for every oods bouht or services en8oyed is the s"$e re"rdless of inco$e. %n other #ords! the +,T p"id e"ts the s"$e portion of "n inco$e! #hether bi or s$"ll. The disp"rity lies in the inco$e e"rned by " person or profit $"rin $"rked by " business! such th"t the hiher the inco$e or profit $"rin! the s$"ller the portion of the inco$e or profit th"t is e"ten by +,T. , converso! the lo#er the inco$e or profit $"rin! the bier the p"rt th"t the +,T e"ts "#"y. ,t the end of the d"y! it is re"lly the lo#er inco$e roup or businesses #ith lo#profit $"rins th"t is "l#"ys h"rdest hit. Nevertheless! the 'onstitution does not re"lly prohibit the i$position of indirect t"xes! like the +,T. >h"t it si$ply provides is th"t 'onress sh"ll evolve " proressive syste$ of t"x"tion. &esort to indirect t"xes should be $ini$ied but not "voided entirely bec"use it is difficult! if not i$possible! to "void the$ by i$posin such t"xes "ccordin to the t"xp"yersD "bility to p" y. %n the c"se of the +,T! the l"# $ini$ies the reressive effects of this i$position by providin for ero r"tin of cert"in tr"ns"ctions (&.,. No. 77
)AC(S* ,rturo Tolentino et "l "re -uestionin the constitution"lity of &, 77< other#ise kno#n "s the Exp"nded +"lue ,dded T"x (E+,T) ?"#. Tolentino "verred th"t this revenue bill did not exclusively oriin"te fro$ the 9ouse of &epresent"tives "s re-uired by 5ection 24! ,rticle < of the 'onstitution. Even thouh &, 77< oriin"ted "s 9@ /7 "nd th"t it p"ssed the 3 re"dins in the 9o&! the s"$e did not co$plete the 3 re"dins in 5en"te for "fter the st re"din it #"s referred to the 5en"te >"ys M e"ns 'o$$ittee there"fter 5en"te p"ssed its o#n version kno#n "s 5en"te @ill <3. Tolentino "verred th"t #h"t 5en"te could h"ve done is "$end 9@ /7 by strikin out its text "nd substitutin it #ith the text of 5@ <3 in th"t #"y Fthe bill re$"ins " 9ouse @ill "nd the 5en"te version 8ust beco$es the text (only the text) of the 9@G. (%ts ironic ho#ever to note th"t Tolentino "nd copetitioner &"ul &oco even sined the s"id 5en"te @ill.) %SSE* >hether or not the E+,T l"# is procedur"lly infir$.
+E-* No. @y " /< vote! the 5upre$e 'ourt re8ected the ch"llene! holdin th"t such consolid"tion #"s consistent #ith the po#er of the 5en"te to propose or concur #ith "$end$ents to the version oriin"ted in the 9o&. >h"t the 'onstitution si$ply $e"ns! "ccordin to the / 8ustices! is th"t the initi"tive $ust co$e fro$ the 9o&. Note "lso th"t there #ere sever"l inst"nces before #here 5en"te p"ssed its o#n version r"ther th"n h"vin the 9o& version "s f"r "s revenue "nd other such bills "re concerned. This pr"ctice of "$end$ent by substitution h"s "l#"ys been "ccepted. The proposition of Tolentino concerns " $ere $"tter of for$. There is no sho#in th"t it #ould $"ke " sinific"nt difference if 5en"te #ere to "dopt his over #h"t h"s been done.
%%. SS(AN(%2E %SSES
,. Claims of Press Freedom, Freedom of Thought and Religious Freedom The hilippine ress %nstitute (%)! petitioner in 6.&. No. ;;44! is " nonprofit or"ni"tion of ne#sp"per publishers est"blished for the i$prove$ent of 8ourn"lis$ in the hilippines. On the other h"nd! petitioner in 6.&. No. ;70! the hilippine @ible 5ociety (@5)! is " nonprofit or"ni"tion en"ed in the printin "nd distribution of bibles "nd other reliious "rticles. @oth petitioners cl"i$ viol"tions of their rihts under L L 4 "nd ; of the @ill of &ihts "s " result of the en"ct$ent of the +,T ?"#. The % -uestions the l"# insof"r "s it h"s #ithdr"#n the exe$ption previously r"nted to the press under L 3 (f) of the N%&'. ,lthouh the exe$ption #"s subse-uently restored by "d$inistr"tive reul"tion #ith respect to the circul"tion inco$e of ne#sp"pers! the % presses its cl"i$ bec"use of the possibility th"t the exe$ption $"y still be re$oved by $ere revoc"tion of the reul"tion of the 5ecret"ry of Kin"nce. On the other h"nd! the @5 oes so f"r "s to -uestion the 5ecret"ryDs po#er to r"nt exe$ption for t#o re"sonsC () The 5ecret"ry of Kin"nce h"s no po#er to r"nt t"x exe$ption bec"use this is vested in 'onress "nd re-uires for its exercise the vote of " $"8ority of "ll its $e$bers B "nd (2) the 5ecret"ryDs duty is to execute the l"#. L 3 of the N%&' cont"ins " list of tr"ns"ctions exe$pted fro$ +,T. ,$on the tr"ns"ctions previously r"nted exe$ption #ereC (f) rintin! public"tion! i$port"tion or s"le of books "nd "ny ne#sp"per! $""ine! revie#! or bulletin #hich "ppe"rs "t reul"r interv"ls #ith fixed prices for subscription "nd s"le "nd #hich is devoted princip"lly to the public"tion of "dvertise$ents. &epublic ,ct No. 77< "$ended L 3 by deletin (f) #ith the result th"t print $edi" bec"$e sub8ect to the +,T #ith respect to "ll "spects of their oper"tions. ?"ter! ho#ever! b"sed on " $e$or"ndu$ of the 5ecret"ry of =ustice! respondent 5ecret"ry of Kin"nce issued &evenue &eul"tions No. /4! d"ted =une 27! //4! exe$ptin the circul"tion inco$e of print $edi" pursu"nt to L 4 ,rticle %%% of the /07 hilippine 'onstitution u"r"nteein ""inst "brid$ent of freedo$ of the press! "$on others. The exe$ption of circul"tion inco$e h"s left inco$e fro$ "dvertise$ents still sub8ect to the +,T.
%t is unnecess"ry to p"ss upon the contention th"t the exe$ption r"nted is beyond the "uthority of the 5ecret"ry of Kin"nce to ive! in vie# of %Ds contention th"t even #ith the exe$ption of the circul"tion revenue of print $edi" there is still "n unconstitution"l "brid$ent of press freedo$ bec"use of the i$position of the +,T on the ross receipts of ne#sp"pers fro$ "dvertise$ents "nd on their "c-uisition of p"per! ink "nd services for public"tion. Even on the "ssu$ption th"t no exe$ption h"s effectively been r"nted to print $edi" tr"ns"ctions! #e find no viol"tion of press freedo$ in these c"ses. To be sure! #e "re not de"lin here #ith " st"tute th"t on its face oper"tes in the "re" of press freedo$. The %Ds cl"i$ is si$ply th"t! as applied to ne#sp"pers! the l"# "brides press freedo$. Even #ith due reconition of its hih est"te "nd its i$port"nce in " de$ocr"tic society! ho#ever! the press is not i$$une fro$ ener"l reul"tion by the 5t"te. %t h"s been heldC The publisher of " ne#sp"per h"s no i$$unity fro$ the "pplic"tion of ener"l l"#s. 9e h"s no speci"l privilee to inv"de the rihts "nd liberties of others. 9e $ust "ns#er for libel. 9e $"y be punished for conte$pt of court. . . . ?ike others! he $ust p"y e-uit"ble "nd nondiscri$in"tory t"xes on his business. . . . 6 The % does not dispute this point! either. >h"t it contends is th"t by #ithdr"#in the exe$ption previously r"nted to print $edi" tr"ns"ctions involvin printin! public"tion! i$port"tion or s"le of ne#sp"pers! &epublic ,ct No. 77< h"s sinled out the press for discri$in"tory tre"t$ent "nd th"t #ithin the cl"ss of $"ss $edi" the l"# discri$in"tes ""inst print $edi" by ivin bro"dc"st $edi" f"vored tre"t$ent. >e h"ve c"refully ex"$ined this "ru$ent! but #e "re un"ble to find " differenti"l tre"t$ent of the press by the l"#! $uch less "ny censori"l $otiv"tion for its en"ct$ent. %f the press is no# re-uired to p"y " v"lue"dded t"x on its tr"ns"ctions! it is not bec"use it is bein sinled out! $uch less t"reted! for speci"l tre"t$ent but only bec"use of the re$ov"l of the exe$ption previously r"nted to it by l"#. The #ithdr"#"l of exe$ption is "ll th"t is involved in these c"ses. Other tr"ns"ctions! like#ise previously r"nted exe$ption! h"ve been delisted "s p"rt of the sche$e to exp"nd the b"se "nd the scope of the +,T syste$. The l"# #ould perh"ps be open to the ch"re of discri$in"tory tre"t$ent if the only privilee #ithdr"#n h"d been th"t r"nted to the press. @ut th"t is not the c"se. The situ"tion in the c"se "t b"r is indeed " f"r cry fro$ those cited by the % in support of its cl"i$ th"t &epublic ,ct No. 77< sub8ects the press to discri$in"tory t"x"tion. %n the c"ses cited! the discri$in"tory purpose #"s cle"r either fro$ the b"ckround of the l"# or fro$ its oper"tion. Kor ex"$ple! in Grosjean v. American Press Co .! 8 the l"# i$posed " license t"x e-uiv"lent to 2 of the ross receipts derived fro$ "dvertise$ents only on ne#sp"pers #hich h"d " circul"tion of $ore th"n 2! copies per #eek. @ec"use the t"x #"s not b"sed on the volu$e of "dvertise$ent "lone but #"s $e"sured by the extent of its circul"tion "s #ell! the l"# "pplied only to the thirteen l"re ne#sp"pers in ?ouisi"n"! le"vin unt"xed four p"pers #ith circul"tion of only slihtly less th"n 2! copies " #eek "nd 2 #eekly ne#sp"pers #hich #ere in serious co$petition #ith the thirteen ne#sp"pers in -uestion. %t #"s #ell kno#n th"t the thirteen ne#sp"pers h"d been critic"l of 5en"tor 9uey ?on! "nd the ?ondo$in"ted leisl"ture of ?ouisi"n" respondent by t"xin #h"t ?on described "s the lyin ne#sp"pers by i$posin on the$ " t"x on lyin. The effect of the t"x #"s to curt"il both their revenue "nd their circul"tion. ,s the A.5.
5upre$e 'ourt noted! the t"x #"s " deliber"te "nd c"lcul"ted device in the uise of " t"x to li$it the circul"tion of infor$"tion to #hich the public is entitled in virtue of the constitution"l u"r"nties. 9 The c"se is " cl"ssic illustr"tion of the #"rnin th"t the po#er to t"x is the po#er to destroy. %n the other c"se 30 invoked by the %! the press #"s "lso found to h"ve been sinled out bec"use everythin #"s exe$pt fro$ the use t"x on ink "nd p"per! except the press. innesot" i$posed " t"x on the s"les of oods in th"t st"te. To protect the s"les t"x! it en"cted " co$ple$ent"ry t"x on the privilee of usin! storin or consu$in in th"t st"te t"nible person"l property by eli$in"tin the residentsD incentive to et oods fro$ outside st"tes #here the s"les t"x $iht be lo#er. The Minnesota Star Triune #"s exe$pted fro$ both t"xes fro$ /<7 to /7. %n /7! ho#ever! the st"te leisl"ture "$ended the t"x sche$e by i$posin the use t"x on the cost of p"per "nd ink used for public"tion. The l"# #"s held to h"ve sinled out the press bec"use () there #"s no re"son for i$posin the use t"x since the press #"s exe$pt fro$ the s"les t"x "nd (2) the use t"x #"s l"id on "n inter$edi"te tr"ns"ction r"ther th"n the ulti$"te ret"il s"le. innesot" h"d " he"vy burden of 8ustifyin the differenti"l tre"t$ent "nd it f"iled to do so. %n "ddition! the A.5. 5upre$e 'ourt found the l"# to be discri$in"tory bec"use the leisl"ture! by ""in "$endin the l"# so "s to exe$pt the first P! of p"per "nd ink used! further n"rro#ed the cover"e of the t"x so th"t only " h"ndful of publishers p"y "ny t"x "t "ll "nd even fe#er p"y "ny sinific"nt "$ount of t"x. 31 The discri$in"tory purpose #"s thus very cle"r. ore recently! in Ar!ansas "riters# Project, $nc. v. Ragland ! 3 it #"s held th"t " l"# #hich t"xed ener"l interest $""ines but not ne#sp"pers "nd reliious! profession"l! tr"de "nd sports 8ourn"ls #"s discri$in"tory bec"use #hile the t"x did not sinle out the press "s " #hole! it t"reted " s$"ll roup #ithin the press. >h"t is $ore! by differenti"tin on the b"sis of contents ( i.e.! bet#een ener"l interest "nd speci"l interests such "s reliion or sports) the l"# bec"$e entirely inco$p"tible #ith the Kirst ,$end$entDs u"r"ntee of freedo$ of the press. These c"ses co$e do#n to thisC th"t unless 8ustified! the differenti"l tre"t$ent of the press cre"tes risks of suppression of expression. %n contr"st! in the c"ses "t b"r! the st"tute "pplies to " #ide r"ne of oods "nd services. The "ru$ent th"t! by i$posin the +,T only on print $edi" #hose ross s"les exceeds 40! but not $ore th"n 7;!! the l"# discri$in"tes 33 is #ithout $erit since it h"s not been sho#n th"t "s " result the cl"ss sub8ect to t"x h"s been unre"son"bly n"rro#ed. The f"ct is th"t this li$it"tion does not "pply to the press "lon but to "ll s"les. Nor is i$per$issible $otive sho#n by the f"ct th"t print $edi" "nd bro"dc"st $edi" "re tre"ted differently. The press is t"xed on its tr"ns"ctions involvin printin "nd public"tion! #hich "re different fro$ the tr"ns"ctions of bro"dc"st $edi". There is thus " re"son"ble b"sis for the cl"ssific"tion. The c"ses c"nv"ssed! it $ust be stressed! esche# "ny suestion th"t o#ners of ne#sp"pers "re i$$une fro$ "ny for$s of ordin"ry t"x"tion. The license t"x in the Grosjean c"se #"s decl"red inv"lid bec"use it #"s one sinle in kind! #ith " lon history of hostile $isuse ""inst the freedo$ of the press. 3@ On the other h"nd! Minneapolis Star "ckno#leded th"t The Kirst ,$end$ent does not prohibit "ll reul"tion of the press Q"nd th"tR the 5t"tes "nd the Keder"l 6overn$ent c"n sub8ect ne#sp"pers to ener"lly "pplic"ble econo$ic reul"tions #ithout cre"tin constitution"l proble$s. 3
>h"t h"s been s"id "bove "lso disposes of the "lle"tions of the @5 th"t the re$ov"l of the exe$ption of printin! public"tion or i$port"tion of books "nd reliious "rticles! "s #ell "s their printin "nd public"tion! like#ise viol"tes freedo$ of thouht "nd of conscience. Kor "s the A.5. 5upre$e 'ourt un"ni$ously held in %imm& S'aggart Ministries v. (oard of )*uali+ation ! 3B the Kree Exercise of &eliion 'l"use does not prohibit i$posin " ener"lly "pplic"ble s"les "nd use t"x on the s"le of reliious $"teri"ls by " reliious or"ni"tion. This brins us to the -uestion #hether the reistr"tion provision of the l"#! 36 "lthouh of ener"l "pplic"bility! nonetheless is inv"lid #hen "pplied to the press bec"use it l"ys " prior restr"int on its essenti"l freedo$. The c"se of American (ile Societ& v. Cit& of Manila 38 is cited by both the @5 "nd the % in support of their contention th"t the l"# i$poses censorship. There! this 'ourt held th"t "n ordin"nce of the 'ity of "nil"! #hich i$posed " license fee on those en"ed in the business of ener"l $erch"ndise! could not be "pplied to the "ppell"ntDs s"le of bibles "nd other reliious liter"ture. This 'ourt relied on Murdoc! v. Penns&lvania ! 39 in #hich it #"s held th"t! "s " license fee is fixed in "$ount "nd unrel"ted to the receipts of the t"xp"yer! the license fee! #hen "pplied to " reliious sect! #"s "ctu"lly bein i$posed "s " condition for the exercise of the sectDs riht under the 'onstitution. Kor th"t re"son! it #"s held! the license fee restr"ins in "dv"nce those constitution"l liberties of press "nd reliion "nd inevit"bly tends to suppress their exercise. @0 @ut! in this c"se! the fee in L 7! "lthouh " fixed "$ount (!)! is not i$posed for the exercise of " privilee but only for the purpose of defr"yin p"rt of the cost of reistr"tion. The reistr"tion re-uire$ent is " centr"l fe"ture of the +,T syste$. %t is desined to provide " record of t"x credits bec"use "ny person #ho is sub8ect to the p"y$ent of the +,T p"ys "n input t"x! even "s he collects "n output t"x on s"les $"de or services rendered. The reistr"tion fee is thus " $ere "d$inistr"tive fee! one not i$posed on the exercise of " privilee! $uch less " constitution"l riht. Kor the foreoin re"sons! #e find the "tt"ck on &epublic ,ct No. 77< on the round th"t it offends the free speech! press "nd freedo$ of reliion u"r"ntees of the 'onstitution to be #ithout $erit. Kor the s"$e re"sons! #e find the cl"i$ of the hilippine Educ"tion"l ublishers ,ssoci"tion (E,) in 6.&. No. ;/3 th"t the incre"se in the price of books "nd other educ"tion"l $"teri"ls "s " result of the +,T #ould viol"te the constitution"l $"nd"te to the overn$ent to ive priority to educ"tion! science "nd technoloy (,rt. %%! L 7) to be unten"ble.
@. Claims of Regressivit&, enial of ue Process, )*ual Protection, and $mpairment of Contracts There is b"sis for p"ssin upon cl"i$s th"t on its f"ce the st"tute viol"tes the u"r"ntees of freedo$ of speech! press "nd reliion. The possible chillin effect #hich it $"y h"ve on the essenti"l freedo$ of the $ind "nd conscience "nd the need to "ssure th"t the ch"nnels of co$$unic"tion "re open "nd oper"tin i$portun"tely de$"nd the exercise of this 'ourtDs po#er of revie#.
There is! ho#ever! no 8ustific"tion for p"ssin upon the cl"i$s th"t the l"# "lso viol"tes the rule th"t t"x"tion $ust be proressive "nd th"t it denies petitionersD riht to due process "nd th"t e-u"l protection of the l"#s. The re"son for this different tre"t$ent h"s been coently st"ted by "n e$inent "uthority on constitution"l l"# thusC Q>Rhen freedo$ of the $ind is i$periled by l"#! it is freedo$ th"t co$$"nds " $o$entu$ of respect* #hen property is i$periled it is the l"#$"kersD 8ud$ent th"t co$$"nds respect. This du"l st"nd"rd $"y not precisely reverse the presu$ption of constitution"lity in civil liberties c"ses! but obviously it does set up " hier"rchy of v"lues #ithin the due process cl"use. @1 %ndeed! the "bsence of thre"t of i$$edi"te h"r$ $"kes the need for 8udici"l intervention less evident "nd underscores the essenti"l n"ture of petitionersD "tt"ck on the l"# on the rounds of reressivity! deni"l of due process "nd e-u"l protection "nd i$p"ir$ent of contr"cts "s " $ere "c"de$ic discussion of the $erits of the l"#. Kor the f"ct is th"t there h"ve even been no notices of "ssess$ents issued to petitioners "nd no deter$in"tions "t the "d$inistr"tive levels of their cl"i$s so "s to illu$in"te the "ctu"l oper"tion of the l"# "nd en"ble us to re"ch sound 8ud$ent re"rdin so fund"$ent"l -uestions "s those r"ised in these suits. Thus! the bro"d "ru$ent ""inst the +,T is th"t it is reressive "nd th"t it viol"tes the re-uire$ent th"t The rule of t"x"tion sh"ll be unifor$ "nd e-uit"ble Q"ndR 'onress sh"ll evolve " proressive syste$ of t"x"tion. @etitioners in 6.&. No. ;70 -uote fro$ " p"per! entitled +,T olicy %ssuesC 5tructure! &eressivity! %nfl"tion "nd Exports by ,l"n ,. T"it of the %ntern"tion"l onet"ry Kund! th"t +,T p"y$ent by lo#inco$e households #ill be " hiher proportion of their inco$es ("nd expenditures) th"n p"y$ents by hiherinco$e households. Th"t is! the +,T #ill be reressive. etitioners contend th"t "s " result of the unifor$ +,T! the t"x on consu$ption oods of those #ho "re in the hiherinco$e br"cket! #hich before #ere t"xed "t " r"te hiher th"n ! h"s been reduced! #hile b"sic co$$odities! #hich before #ere t"xed "t r"tes r"nin fro$ 3 to ;! "re no# t"xed "t " hiher r"te. =ust "s viorously "s it is "sserted th"t the l"# is reressive! the opposite cl"i$ is pressed by respondents th"t in f"ct it distributes the t"x burden to "s $"ny oods "nd services "s possible p"rticul"rly to those #hich "re #ithin the re"ch of hiherinco$e roups! even "s the l"# exe$pts b"sic oods "nd services. %t is thus e-uit"ble. The oods "nd properties sub8ect to the +,T "re those used or consu$ed by hiher inco$e roups. These include re"l properties held pri$"rily for s"le to custo$ers or held for le"se in the ordin"ry course of business! the riht or privilee to use industri"l! co$$erci"l or scientific e-uip$ent! hotels! rest"ur"nts "nd si$il"r pl"ces! tourist buses! "nd the like. On the other h"nd! s$"ll business est"blish$ents! #ith "nnu"l ross s"les of less th"n ;!! "re exe$pted. This! "ccordin to respondents! re$oves fro$ the cover"e of the l"# so$e 3! business est"blish$ents. On the other h"nd! "n occ"sion"l p"per @3 of the 'enter for &ese"rch "nd 'o$$unic"tion cities " NE:, study th"t the +,T h"s $ini$"l i$p"ct on infl"tion "nd inco$e distribution "nd th"t #hile "ddition"l expenditure for the lo#est inco$e cl"ss is only 3 or .4/ " ye"r! th"t for " f"$ily e"rnin ;! " ye"r or $ore is 0!34 or 2.2. ?"ckin e$piric"l d"t" on #hich to b"se "ny conclusion re"rdin these "ru$ents! "ny discussion #hether the +,T is reressive in the sense th"t it #ill hit the poor "nd $iddleinco$e roup in society h"rder th"n it #ill the rich! "s the 'ooper"tive Anion of the hilippines ('A) cl"i$s in 6.&. No. ;073! is l"rely "n "c"de$ic exercise. On the other h"nd! the 'ADs contention th"t 'onressD
#ithdr"#"l of exe$ption of producers cooper"tives! $"rketin cooper"tives! "nd service cooper"tives! #hile $"int"inin th"t r"nted to electric cooper"tives! not only oes ""inst the constitution"l policy to pro$ote cooper"tives "s instru$ents of soci"l 8ustice (,rt. S%%! L ;) but "lso denies such cooper"tives the e-u"l protection of the l"# is "ctu"lly " policy "ru$ent. The leisl"ture is not re-uired to "dhere to " policy of "ll or none in choosin the sub8ect of t"x"tion. @@ Nor is the contention of the 'h"$ber of &e"l Est"te "nd @uilders ,ssoci"tion ('&E@,)! petitioner in 6.&. ;7;4! th"t the +,T #ill reduce the $"rk up of its $e$bers by "s $uch "s 0; to / "ny $ore concrete. %t is " $ere "lle"tion. On the other h"nd! the cl"i$ of the hilippine ress %nstitute! petitioner in 6.&. No. ;;44! th"t the +,T #ill drive so$e of its $e$bers out of circul"tion bec"use their profits fro$ "dvertise$ents #ill not be enouh to p"y for their t"x li"bility! #hile purportin to be b"sed on the fin"nci"l st"te$ents of the ne#sp"pers in -uestion! still f"lls short of the est"blish$ent of f"cts by evidence so necess"ry for "d8udic"tin the -uestion #hether the t"x is oppressive "nd confisc"tory. %ndeed! reressivity is not " ne"tive st"nd"rd for courts to enforce. >h"t 'onress is re-uired by the 'onstitution to do is to evolve " proressive syste$ of t"x"tion. This is " directive to 'onress! 8ust like the directive to it to ive priority to the en"ct$ent of l"#s for the enh"nce$ent of hu$"n dinity "nd the reduction of soci"l! econo$ic "nd politic"l ine-u"lities (,rt. S%%%! L )! or for the pro$otion of the riht to -u"lity educ"tion (,rt. S%+! L ). These provisions "re put in the 'onstitution "s $or"l incentives to leisl"tion! not "s 8udici"lly enforce"ble rihts. ,t "ll events! our /00 decision in -apatiran @ should h"ve l"id to rest the -uestions no# r"ised ""inst the +,T. There si$il"r "ru$ents $"de ""inst the oriin"l +,T ?"# (Executive Order No. 273) #ere held to be hypothetic"l! #ith no $ore b"sis th"n ne#sp"per "rticles #hich this 'ourt found to be he"rs"y "nd Q#ithoutR evidenti"ry v"lue. ,s &epublic ,ct No. 77< $erely exp"nds the b"se of the +,T syste$ "nd its cover"e "s provided in the oriin"l +,T ?"#! further deb"te on the desir"bility "nd #isdo$ of the l"# should h"ve shifted to 'onress. Only slihtly less "bstr"ct but nonetheless hypothetic"l is the contention of '&E@, th"t the i$position of the +,T on the s"les "nd le"ses of re"l est"te by virtue of contr"cts entered into prior to the effectivity of the l"# #ould viol"te the constitution"l provision th"t No l"# i$p"irin the obli"tion of contr"cts sh"ll be p"ssed. %t is enouh to s"y th"t the p"rties to " contr"ct c"nnot! throuh the exercise of prophetic discern$ent! fetter the exercise of the t"xin po#er of the 5t"te. Kor not only "re existin l"#s re"d into contr"cts in order to fix obli"tions "s bet#een p"rties! but the reserv"tion of essenti"l "ttributes of soverein po#er is "lso re"d into contr"cts "s " b"sic postul"te of the le"l order. The policy of protectin contr"cts ""inst i$p"ir$ent presupposes the $"inten"nce of " overn$ent #hich ret"ins "de-u"te "uthority to secure the pe"ce "nd ood order of society. @B %n truth! the 'ontr"ct 'l"use h"s never been thouht "s " li$it"tion on the exercise of the 5t"teDs po#er of t"x"tion s"ve only #here " t"x exe$ption h"s been r"nted for " v"lid consider"tion. @6 5uch is not the c"se of ,? in 6.&. No. ;0;2! "nd #e do not underst"nd it to $"ke this cl"i$. &"ther! its position! "s discussed "bove! is th"t the re$ov"l of its t"x exe$ption c"nnot be $"de by " ener"l! but only by " specific! l"#.
The subst"ntive issues r"ised in so$e of the c"ses "re presented in "bstr"ct! hypothetic"l for$ bec"use of the l"ck of " concrete record. >e "ccept th"t this 'ourt does not only "d8udic"te priv"te c"ses* th"t public "ctions by non9ohfeldi"n @8 or ideoloic"l pl"intiffs "re no# coni"ble provided they $eet the st"ndin re-uire$ent of the 'onstitution* th"t under ,rt. +%%%! L ! 2 the 'ourt h"s " speci"l function of vindic"tin constitution"l rihts. Nonetheless the feelin c"nnot be esc"ped th"t #e do not h"ve before us in these c"ses " fully developed f"ctu"l record th"t "lone c"n i$p"rt to our "d8udic"tion the i$p"ct of "ctu"lity @9 to insure th"t decision$"kin is infor$ed "nd #ell rounded. Needless to s"y! #e do not h"ve po#er to render "dvisory opinions or even 8urisdiction over petitions for decl"r"tory 8ud$ent. %n effect #e "re bein "sked to do #h"t the 'onference 'o$$ittee is precisely "ccused of h"vin done in these c"ses J to sit "s " third leisl"tive ch"$ber to revie# leisl"tion. >e "re told! ho#ever! th"t the po#er of 8udici"l revie# is not so $uch po#er "s it is duty i$posed on this 'ourt by the 'onstitution "nd th"t #e #ould be re$iss in the perfor$"nce of th"t duty if #e decline to look behind the b"rriers set by the principle of sep"r"tion of po#ers. ,rt. +%%%! L ! 2 is cited in support of this vie#C =udici"l po#er includes the duty of the courts of 8ustice to settle "ctu"l controversies involvin rihts #hich "re le"lly de$"nd"ble "nd enforce"ble! "nd to deter$ine #hether or not there h"s been " r"ve "buse of discretion "$ountin to l"ck or excess of 8urisdiction on the p"rt of "ny br"nch or instru$ent"lity of the 6overn$ent. To vie# the 8udici"l po#er of revie# "s " duty is nothin ne#. 'hief =ustice "rsh"ll s"id so in 03! to 8ustify the "ssertion of this po#er in Marur& v. Madison %t is e$ph"tic"lly the province "nd duty of the 8udici"l dep"rt$ent to s"y #h"t the l"# is. Those #ho "pply the rule to p"rticul"r c"ses $ust of necessity expound "nd interpret th"t rule. %f t#o l"#s conflict #ith e"ch other! the courts $ust decide on the oper"tion of e"ch. 0 =ustice ?"urel echoed this 8ustific"tion in /3< in Angara v. )lectoral Commission ,nd #hen the 8udici"ry $edi"tes to "lloc"te constitution"l bound"ries! it does not "ssert "ny superiority over the other dep"rt$ents* it does not in re"lity nullify or inv"lid"te "n "ct of the leisl"ture! but only "sserts the sole$n "nd s"cred obli"tion "ssined to it by the 'onstitution to deter$ine conflictin cl"i$s of "uthority under the 'onstitution "nd to est"blish for the p"rties in "n "ctu"l controversy the rihts #hich th"t instru$ent secures "nd u"r"ntees to the$. 1 This conception of the 8udici"l c"ses of this 'ourt follo#in Angara.
po#er
h"s
been
"ffir$ed
in
sever"l
%t does not "dd "nythin! therefore! to invoke this duty to 8ustify this 'ourtDs intervention in #h"t is essenti"lly " c"se th"t "t best is not ripe for "d8udic"tion. Th"t duty $ust still be perfor$ed in the context of " concrete c"se or controversy! "s ,rt. +%%%! L ;(2) cle"rly defines our 8urisdiction in ter$s of c"ses! "nd nothin but c"ses. Th"t the other dep"rt$ents of the overn$ent $"y h"ve co$$itted " r"ve
"buse of discretion is not "n independent round for exercisin our po#er. :isre"rd of the essenti"l li$its i$posed by the c"se "nd controversy re-uire$ent c"n in the lon run only result in under$inin our "uthority "s " court of l"#. Kor! "s 8udes! #h"t #e "re c"lled upon to render is 8ud$ent "ccordin to l"#! not "ccordin to #h"t $"y "ppe"r to be the opinion of the d"y. (/EN(%N/ 2S SECRE(AR /) )%NANCE 51997 )AC(S* ,rturo Tolentino et "l "re -uestionin the constitution"lity of &, 77< other#ise kno#n "s the Exp"nded +"lue ,dded T"x (E+,T) ?"#. Tolentino "verred th"t this revenue bill did not exclusively oriin"te fro$ the 9ouse of &epresent"tives "s re-uired by 5ection 24! ,rticle < of the 'onstitution. Even thouh &, 77< oriin"ted "s 9@ /7 "nd th"t it p"ssed the 3 re"dins in the 9o&! the s"$e did not co$plete the 3 re"dins in 5en"te for "fter the st re"din it #"s referred to the 5en"te >"ys M e"ns 'o$$ittee there"fter 5en"te p"ssed its o#n version kno#n "s 5en"te @ill <3. Tolentino "verred th"t #h"t 5en"te could h"ve done is "$end 9@ /7 by strikin out its text "nd substitutin it #ith the text of 5@ <3 in th"t #"y Fthe bill re$"ins " 9ouse @ill "nd the 5en"te version 8ust beco$es the text (only the text) of the 9@G. (%ts ironic ho#ever to note th"t Tolentino "nd copetitioner &"ul &oco even sined the s"id 5en"te @ill.) %SSE* >hether or not the E+,T l"# is procedur"lly infir$. +E-* No. @y " /< vote! the 5upre$e 'ourt re8ected the ch"llene! holdin th"t such consolid"tion #"s consistent #ith the po#er of the 5en"te to propose or concur #ith "$end$ents to the version oriin"ted in the 9o&. >h"t the 'onstitution si$ply $e"ns! "ccordin to the / 8ustices! is th"t the initi"tive $ust co$e fro$ the 9o&. Note "lso th"t there #ere sever"l inst"nces before #here 5en"te p"ssed its o#n version r"ther th"n h"vin the 9o& version "s f"r "s revenue "nd other such bills "re concerned. This pr"ctice of "$end$ent by substitution h"s "l#"ys been "ccepted. The proposition of Tolentino concerns " $ere $"tter of for$. There is no sho#in th"t it #ould $"ke " sinific"nt difference if 5en"te #ere to "dopt his over #h"t h"s been done.
2A( %SSES
+. The titles of S . /o. 0123 and 4 . /o. 00056 . ,? $"int"ins th"t &.,. No. 77< viol"tes ,rt. +%! L2< () of the 'onstitution #hich provides th"t FEvery bill p"ssed by 'onress sh"ll e$br"ce only one sub8ect #hich sh"ll be expressed in the title thereof.G ,? contends th"t the "$end$ent of its fr"nchise by the #ithdr"#"l of its exe$ption fro$ the +,T is not expressed in the title of the l"#. ursu"nt to L3 of .:. No. ;/! ,? p"ys " fr"nchise t"x of 2 on its ross revenue Fin lieu of "ll other t"xes! duties! roy"lties! reistr"tion! license "nd other fees "nd ch"res of "ny kind! n"ture! or description! i$posed! levied! est"blished! "ssessed or collected by "ny $unicip"l! city! provinci"l or n"tion"l "uthority or overn$ent "ency! no# or in the future.G ,? #"s exe$pted fro$ the p"y$ent of the +,T "lon #ith other entities by L3 of the N"tion"l %ntern"l &evenue 'ode! #hich provides "s follo#sC
L3. )7empt transactions . J The follo#in sh"ll be exe$pt fro$ the v"lue"dded t"xC xxx xxx xxx (-) Tr"ns"ctions #hich "re exe$pt under speci"l l"#s or intern"tion"l "ree$ents to #hich the hilippines is " sin"tory. &.,. No. 77< seeks to #ithdr"# cert"in exe$ptions! includin th"t r"nted to ,?! by "$endin L3! "s follo#sC L3. )7empt transactions . J The follo#in sh"ll be exe$pt fro$ the v"lue"dded t"xC xxx xxx xxx (-) Tr"ns"ctions #hich "re exe$pt under speci"l l"#s! except those r"nted under residenti"l :ecree Nos. <%:EN%N6 %T5 T,S @,5E ,N: EN9,N'%N6 %T5 ,:%N%5T&,T%ON! ,N: KO& T9E5E A&O5E5 ,EN:%N6 ,N: &EE,?%N6 T9E &E?E+,NT &O+%5%ON5 OK T9E N,T%ON,? %NTE&N,? &E+ENAE 'O:E! ,5 ,EN:E:! ,N: KO& OT9E& A&O5E5. @y st"tin th"t &.,. No. 77< seeks to FQ&E5T&A'TA&ER T9E +,?AE,::E: T,S (+,T) 5I5TE Q@IR >%:EN%N6 %T5 T,S @,5E ,N: EN9,N'%N6 %T5 ,:%N%5T&,T%ON! ,N: KO& T9E5E A&O5E5 ,EN:%N6 ,N: &EE,?%N6 T9E &E?E+,NT &O+%5%ON5 OK T9E N,T%ON,? %NTE&N,? &E+ENAE 'O:E! ,5 ,EN:E: ,N: KO& OT9E& A&O5E5!G 'onress thereby cle"rly expresses its intention to "$end "ny provision of the N%&' #hich st"nds in the #"y of "cco$plishin the purpose of the l"#. ,? "sserts th"t the "$end$ent of its fr"nchise $ust be reflected in the title of the l"# by specific reference to .:. No. ;/. %t is unnecess"ry to do this in order to co$ply #ith the constitution"l re-uire$ent! since it is "lre"dy st"ted in the title th"t the l"# seeks to "$end the pertinent provisions of the N%&'! "$on #hich is L3(-)! in order to #iden the b"se of the +,T. ,ctu"lly! it is the bill #hich beco$es " l"# th"t is re-uired to express in its title the sub8ect of leisl"tion. The titles of 9. No. /7 "nd 5. No. <3 in f"ct specific"lly referred to L3 of the N%&' "s "$on the provisions souht to be "$ended. >e "re s"tisfied th"t sufficient notice h"d been iven of the pendency of these bills in 'onress before they #ere en"cted into #h"t is no# &.,. No. 77<. %n Philippine %udges Association v . Prado! supra! " si$il"r "ru$ent "s th"t no# $"de by ,? #"s re8ected. &.,. No. 73;4 is entitled ,N ,'T '&E,T%N6 T9E 9%?%%NE O5T,? 'O&O&,T%ON! :EK%N%N6 %T5 O>E&5! KAN'T%ON5 ,N: &E5ON5%@%?%T%E5! &O+%:%N6 KO& &E6A?,T%ON OK T9E %N:A5T&I ,N: KO& OT9E& A&O5E5 'ONNE'TE: T9E&E>%T9. %t cont"ined " provision repe"lin "ll fr"nkin privilees. %t #"s contended th"t the #ithdr"#"l of fr"nkin
privilees #"s not expressed in the title of the l"#. %n holdin th"t there #"s sufficient description of the sub8ect of the l"# in its title! includin the repe"l of fr"nkin privilees! this 'ourt heldC To re-uire every end "nd $e"ns necess"ry for the "cco$plish$ent of the ener"l ob8ectives of the st"tute to be expressed in its title #ould not only be unre"son"ble but #ould "ctu"lly render leisl"tion i$possible. Q'ooley! 'onstitution"l ?i$it"tions! 0th Ed.! p. 2/7R ,s h"s been correctly expl"inedC The det"ils of " leisl"tive "ct need not be specific"lly st"ted in its title! but $"tter er$"ne to the sub8ect "s expressed in the title! "nd "dopted to the "cco$plish$ent of the ob8ect in vie#! $"y properly be included in the "ct. Thus! it is proper to cre"te in the s"$e "ct the $"chinery by #hich the "ct is to be enforced! to prescribe the pen"lties for its infr"ction! "nd to re$ove obst"cles in the #"y of its execution. %f such $"tters "re properly connected #ith the sub8ect "s expressed in the title! it is unnecess"ry th"t they should "lso h"ve speci"l $ention in the title. ( Southern Pac. Co. v. (artine ! 7 Ked. 72;) (227 5'&, "t 7770) +%. Claims of press freedom and religious liert& . >e h"ve held th"t! "s " ener"l proposition! the press is not exe$pt fro$ the t"xin po#er of the 5t"te "nd th"t #h"t the constitution"l u"r"ntee of free press prohibits "re l"#s #hich sinle out the press or t"ret " roup belonin to the press for speci"l tre"t$ent or #hich in "ny #"y discri$in"te ""inst the press on the b"sis of the content of the public"tion! "nd &.,. No. 77< is none of these. No# it is contended by the % th"t by re$ovin the exe$ption of the press fro$ the +,T #hile $"int"inin those r"nted to others! the l"# discri$in"tes ""inst the press. ,t "ny r"te! it is "verred! Feven nondiscri$in"tory t"x"tion of constitution"lly u"r"nteed freedo$ is unconstitution"l.G >ith respect to the first contention! it #ould suffice to s"y th"t since the l"# r"nted the press " privilee! the l"# could t"ke b"ck the privilee "nyti$e #ithout offense to the 'onstitution. The re"son is si$pleC by r"ntin exe$ptions! the 5t"te does not forever #"ive the exercise of its soverein prero"tive. %ndeed! in #ithdr"#in the exe$ption! the l"# $erely sub8ects the press to the s"$e t"x burden to #hich other businesses h"ve lon "o been sub8ect. %t is thus different fro$ the t"x involved in the c"ses invoked by the %. The license t"x in Grosjean v . American Press Co .! 2/7 A.5. 233! 0 ?. Ed. << (/3<) #"s found to be discri$in"tory bec"use it #"s l"id on the ross "dvertisin receipts only of ne#sp"pers #hose #eekly circul"tion #"s over 2!! #ith the result th"t the t"x "pplied only to 3 out of 24 publishers in ?ouisi"n". These l"re p"pers #ere critic"l of 5en"tor 9uey ?on #ho controlled the st"te leisl"ture #hich en"cted the license t"x. The censori"l $otiv"tion for the l"# #"s thus evident. On the other h"nd! in Minneapolis Star 8 Triune Co . v. Minnesota Comm9r of Revenue ! 4< A.5. ;7;! 7; ?. Ed. 2d 2/; (/03)! the t"x #"s found to be discri$in"tory bec"use "lthouh it could h"ve been $"de li"ble for the s"les t"x or! in lieu thereof! for the use t"x on the privilee of usin! storin or consu$in t"nible oods! the press #"s not. %nste"d! the press #"s exe$pted fro$ both t"xes. %t #"s! ho#ever! l"ter $"de to p"y " special use t"x on the cost of p"per "nd ink #hich $"de these ite$s Fthe only ite$s sub8ect to the use t"x th"t #ere co$ponent of oods to be sold "t ret"il.G The A.5. 5upre$e 'ourt held th"t the differenti"l tre"t$ent of the press Fsuests th"t the o"l of reul"tion is not rel"ted to
suppression of expression! "nd such o"l is presu$ptively unconstitution"l.G %t #ould therefore "ppe"r th"t even " l"# th"t f"vors the press is constitution"lly suspect. (5ee the dissent of &ehn-uist! =. in th"t c"se) Nor is it true th"t only t#o exe$ptions previously r"nted by E.O. No. 273 "re #ithdr"#n F"bsolutely "nd un-u"lifiedlyG by &.,. No. 77<. Other exe$ptions fro$ the +,T! such "s those previously r"nted to ,?! petroleu$ concession"ires! enterprises reistered #ith the Export rocessin one ,uthority! "nd $"ny $ore "re like#ise tot"lly #ithdr"#n! in "ddition to exe$ptions #hich "re p"rti"lly #ithdr"#n! in "n effort to bro"den the b"se of the t"x. The % s"ys th"t the discri$in"tory tre"t$ent of the press is hihlihted by the f"ct th"t tr"ns"ctions! #hich "re profit oriented! continue to en8oy exe$ption under &.,. No. 77<. ,n enu$er"tion of so$e of these tr"ns"ctions #ill suffice to sho# th"t by "nd l"re this is not so "nd th"t the exe$ptions "re r"nted for " purpose. ,s the 5olicitor 6ener"l s"ys! such exe$ptions "re r"nted! in so$e c"ses! to encour"e "ricultur"l production "nd! in other c"ses! for the person"l benefit of the enduser r"ther th"n for profit. The exe$pt tr"ns"ctions "reC (") 6oods for consu$ption or use #hich "re in their oriin"l st"te ("ricultur"l! $"rine "nd forest products! cotton seeds in their oriin"l st"te! fertiliers! seeds! seedlins! finerlins! fish! pr"#n livestock "nd poultry feeds) "nd oods or services to enh"nce "riculture ($illin of p"l"y! corn! su"r c"ne "nd r"# su"r! livestock! poultry feeds! fertilier! inredients used for the $"nuf"cture of feeds). (b) 6oods used for person"l consu$ption or use (household "nd person"l effects of citiens returnin to the hilippines) or for profession"l use! like profession"l instru$ents "nd i$ple$ents! by persons co$in to the hilippines to settle here. (c) 6oods sub8ect to excise t"x such "s petroleu$ products or to be used for $"nuf"cture of petroleu$ products sub8ect to excise t"x "nd services sub8ect to percent"e t"x. (d) Educ"tion"l services! $edic"l! dent"l! hospit"l "nd veterin"ry services! "nd services rendered under e$ployere$ployee rel"tionship. (e) >orks of "rt "nd si$il"r cre"tions sold by the "rtist hi$self. (f) Tr"ns"ctions exe$pted under speci"l l"#s! or intern"tion"l "ree$ents. () Exports"les by persons not +,Treistered. (h) 6oods or services #ith ross "nnu"l s"le or receipt not exceedin P:33,333.33. (&espondents 'onsolid"ted 'o$$ent on the otions for &econsider"tion! pp. ;0<) The % "sserts th"t it does not re"lly $"tter th"t the l"# does not discri$in"te ""inst the press bec"use Feven nondiscri$in"tory t"x"tion on constitution"lly u"r"nteed freedo$ is unconstitution"l.G % cites in
support of this "ssertion the follo#in st"te$ent in Murdoc! v. Penns&lvania! 3/ A.5. ;! 07 ?. Ed. 2/2 (/43)C The f"ct th"t the ordin"nce is Fnondiscri$in"toryG is i$$"teri"l. The protection "fforded by the Kirst ,$end$ent is not so restricted. , license t"x cert"inly does not "c-uire constitution"l v"lidity bec"use it cl"ssifies the privilees protected by the Kirst ,$end$ent "lon #ith the #"res "nd $erch"ndise of hucksters "nd peddlers "nd tre"ts the$ "ll "like. 5uch e-u"lity in tre"t$ent does not s"ve the ordin"nce. Kreedo$ of press! freedo$ of speech! freedo$ of reliion "re in preferred position. The 'ourt #"s spe"kin in th"t c"se of " license ta7 ! #hich! unlike "n ordin"ry t"x! is $"inly for reul"tion. %ts i$position on the press is unconstitution"l bec"use it l"ys " prior restr"int on the exercise of its riht. 9ence! "lthouh its "pplic"tion to others! such those sellin oods! is v"lid! its "pplic"tion to the press or to reliious roups! such "s the =ehov"hs >itnesses! in connection #ith the l"tters s"le of reliious books "nd p"$phlets! is unconstitution"l. ,s the A.5. 5upre$e 'ourt put it! Fit is one thin to i$pose " t"x on inco$e or property of " pre"cher. %t is -uite "nother thin to ex"ct " t"x on hi$ for deliverin " ser$on.G , si$il"r rulin #"s $"de by this 'ourt in American (ile Societ& v . Cit& of Manila ! hil. 30< (/;7) #hich inv"lid"ted " city ordin"nce re-uirin " business license fee on those en"ed in the s"le of ener"l $erch"ndise. %t #"s held th"t the t"x could not be i$posed on the s"le of bibles by the ,$eric"n @ible 5ociety #ithout restr"inin the free exercise of its riht to prop""te. The +,T is! ho#ever! different. %t is not " license t"x. %t is not " t"x on the exercise of " privilee! $uch less " constitution"l riht. %t is i$posed on the s"le! b"rter! le"se or exch"ne of oods or properties or the s"le or exch"ne of services "nd the le"se of properties purely for revenue purposes. To sub8ect the press to its p"y$ent is not to burden the exercise of its riht "ny $ore th"n to $"ke the press p"y inco$e t"x or sub8ect it to ener"l reul"tion is not to viol"te its freedo$ under the 'onstitution. ,ddition"lly! the hilippine @ible 5ociety! %nc. cl"i$s th"t "lthouh it sells bibles! the proceeds derived fro$ the s"les "re used to subsidie the cost of printin copies #hich "re iven free to those #ho c"nnot "fford to p"y so th"t to t"x the s"les #ould be to incre"se the price! #hile reducin the volu$e of s"le. 6r"ntin th"t to be the c"se! the resultin burden on the exercise of reliious freedo$ is so incident"l "s to $"ke it difficult to differenti"te it fro$ "ny other econo$ic i$position th"t $iht $"ke the riht to disse$in"te reliious doctrines costly. Other#ise! to follo# the petitioners "ru$ent! to incre"se the t"x on the s"le of vest$ents #ould be to l"y "n i$per$issible burden on the riht of the pre"cher to $"ke " ser$on. On the other h"nd the reistr"tion fee of !. i$posed by L7 of the N%&'! "s "$ended by L7 of &.,. No. 77
+%%. Alleged violations of the due process, e*ual protection and contract clauses and the rule on ta7ation . '&E@, "sserts th"t &.,. No. 77< () i$p"irs the obli"tions of contr"cts! (2) cl"ssifies tr"ns"ctions "s covered or exe$pt #ithout re"son"ble b"sis "nd (3) viol"tes the rule th"t t"xes should be unifor$ "nd e-uit"ble "nd th"t 'onress sh"ll Fevolve " proressive syste$ of t"x"tion.G >ith respect to the first contention! it is cl"i$ed th"t the "pplic"tion of the t"x to existin contr"cts of the s"le of re"l property by inst"ll$ent or on deferred p"y$ent b"sis #ould result in subst"nti"l incre"ses in the $onthly "$orti"tions to be p"id bec"use of the +,T. The "ddition"l "$ount! it is pointed out! is so$ethin th"t the buyer did not "nticip"te "t the ti$e he entered into the contr"ct. The short "ns#er to this is the one iven by this 'ourt in "n e"rly c"seC F,uthorities fro$ nu$erous sources "re cited by the pl"intiffs! but none of the$ sho# th"t " l"#ful t"x on " ne# sub8ect! or "n incre"sed t"x on "n old one! interferes #ith " contr"ct or i$p"irs its obli"tion! #ithin the $e"nin of the 'onstitution. Even thouh such t"x"tion $"y "ffect p"rticul"r contr"cts! "s it $"y incre"se the debt of one person "nd lessen the security of "nother! or $"y i$pose "ddition"l burdens upon one cl"ss "nd rele"se the burdens of "nother! still the t"x $ust be p"id unless prohibited by the 'onstitution! nor c"n it be s"id th"t it i$p"irs the obli"tion of "ny existin contr"ct in its true le"l sense.G (?" %nsul"r v. "chuc" 6o T"uco "nd Nubl" 'o5ion! 3/ hil. ;<7! ;74 (//)). %ndeed not only existin l"#s but "lso F the reservation of the essential attriutes of sovereignt& ! is . . . re"d into contr"cts "s " postul"te of the le"l order.G ( Philippine;American
Kin"lly! it is contended! for the re"sons "lre"dy noted! th"t &.,. No. 77< "lso viol"tes ,rt. +%! L20() #hich provides th"t FThe rule of t"x"tion sh"ll be unifor$ "nd e-uit"ble. The 'onress sh"ll evolve " proressive syste$ of t"x"tion.G E-u"lity "nd unifor$ity of t"x"tion $e"ns th"t "ll t"x"ble "rticles or kinds of property of the s"$e cl"ss be t"xed "t the s"$e r"te. The t"xin po#er h"s the "uthority to $"ke re"son"ble "nd n"tur"l cl"ssific"tions for purposes of t"x"tion. To s"tisfy this re-uire$ent it is enouh th"t the st"tute or ordin"nce "pplies e-u"lly to "ll persons! for$s "nd corpor"tions pl"ced in si$il"r situ"tion. ( Cit& of (aguio v. e h"t it si$ply provides is th"t 'onress sh"ll F evolve " proressive syste$ of t"x"tion.G The constitution"l provision h"s been interpreted to $e"n si$ply th"t Fdirect t"xes "re . . . to be preferred Q"ndR "s $uch "s possible! indirect t"xes should be $ini$ied.G (E. KE&N,N:O! T9E 'ON5T%TAT%ON OK T9E 9%?%%NE5 22 (5econd ed. (/77)). %ndeed! the $"nd"te to 'onress is not to prescrie ! but to evolve! " proressive t"x syste$. Other#ise! s"les t"xes! #hich perh"ps "re the oldest for$ of indirect t"xes! #ould h"ve been prohibited #ith the procl"$"tion of ,rt. +%%%! L7() of the /73 'onstitution fro$ #hich the present ,rt. +%! L20() #"s t"ken. 5"les t"xes "re "lso reressive.
&esort to indirect t"xes should be minimi+ed but not avoided entirely bec"use it is difficult! if not i$possible! to "void the$ by i$posin such t"xes "ccordin to the t"xp"yers "bility to p"y. %n the c"se of the +,T! the l"# $ini$ies the reressive effects of this i$position by providin for +ero rating of cert"in tr"ns"ctions (&.,. No. 77orks of "rt "nd si$il"r cre"tions sold by the "rtist hi$self. (f) Tr"ns"ctions exe$pted under speci"l l"#s! or intern"tion"l "ree$ents. () Exports"les by persons not +,Treistered. (h) 6oods or services #ith ross "nnu"l s"le or receipt not exceedin P:33,333.33. (&espondents 'onsolid"ted 'o$$ent on the otions for &econsider"tion! pp. ;0<) On the other h"nd! the tr"ns"ctions #hich "re sub8ect to the +,T "re those #hich involve oods "nd services #hich "re used or "v"iled of $"inly by hiher inco$e roups. These include re"l properties held pri$"rily for s"le to custo$ers or for le"se in the ordin"ry course of tr"de or business! the riht or privilee to use p"tent! copyriht! "nd other si$il"r property or riht! the riht or privilee to use industri"l! co$$erci"l or scientific e-uip$ent! $otion picture fil$s! t"pes "nd discs! r"dio! television! s"tellite tr"ns$ission "nd c"ble television ti$e! hotels! rest"ur"nts "nd si$il"r pl"ces! securities! lendin invest$ents! t"xic"bs! utility c"rs for rent! tourist buses! "nd other co$$on c"rriers! services of fr"nchise r"ntees of telephone "nd teler"ph. The proble$ #ith '&E@,s petition is th"t it presents bro"d cl"i$s of constitution"l viol"tions by tenderin issues not "t ret"il but "t #holes"le "nd in the "bstr"ct. There is no fully developed record #hich
c"n i$p"rt to "d8udic"tion the i$p"ct of "ctu"lity. There is no f"ctu"l found"tion to sho# in the concrete the "pplic"tion of the l"# to actual contracts "nd exe$plify its effect on property rihts. Kor the f"ct is th"t petitioners $e$bers h"ve not even been "ssessed the +,T. etitioners c"se is not $"de concrete by " series of hypothetic"l -uestions "sked #hich "re no different fro$ those de"lt #ith in "dvisory opinions. The difficulty confrontin petitioner is thus "pp"rent. 9e "llees "rbitr"riness. , $ere "lle"tion! "s here! does not suffice. There $ust be " f"ctu"l found"tion of such unconstitution"l t"int. 'onsiderin th"t petitioner here #ould conde$n such " provision "s void on its f"ce! he h"s not $"de out " c"se. This is $erely to "dhere to the "uthorit"tive doctrine th"t #here the due process "nd e-u"l protection cl"uses "re invoked! considerin th"t they "re not fixed rules but r"ther bro"d st"nd"rds! there is " need for proof of such persu"sive ch"r"cter "s #ould le"d to such " conclusion. ,bsent such " sho#in! the presu$ption of v"lidity $ust prev"il. (Sison, %r. v. Ancheta ! 3 5'&, "t <<) ,d8udic"tion of these bro"d cl"i$s $ust "#"it the develop$ent of " concrete c"se. %t $"y be th"t postpone$ent of "d8udic"tion #ould result in " $ultiplicity of suits. This need not be the c"se! ho#ever. Enforce$ent of the l"# $"y ive rise to such " c"se. , test c"se! provided it is "n "ctu"l c"se "nd not "n "bstr"ct or hypothetic"l one! $"y thus be presented. Nor is h"rdship to t"xp"yers "lone "n "de-u"te 8ustific"tion for "d8udic"tin "bstr"ct issues. Other#ise! "d8udic"tion #ould be no different fro$ the ivin of "dvisory opinion th"t does not re"lly settle le"l issues. >e "re told th"t it is our duty under ,rt. +%%%! L! 2 to decide #henever " cl"i$ is $"de th"t Fthere h"s been " r"ve "buse of discretion "$ountin to l"ck or excess of 8urisdiction on the p"rt of "ny br"nch or instru$ent"lity of the overn$ent.G This duty c"n only "rise if "n "ctu"l c"se or controversy is before us. Ander ,rt . +%%%! L; our 8urisdiction is defined in ter$s of Fc"sesG "nd "ll th"t ,rt. +%%%! L! 2 c"n pl"usibly $e"n is th"t in the exercise of th"t jurisdiction #e h"ve the judicial po'er to deter$ine -uestions of r"ve "buse of discretion by "ny br"nch or instru$ent"lity of the overn$ent. ut in "nother #"y! #h"t is r"nted in ,rt. +%%%! L! 2 is F8udici"l po#er!G #hich is Fthe po#er of " court to he"r "nd decide c"ses pendin bet#een p"rties #ho h"ve the riht to sue "nd be sued in the courts of l"# "nd e-uityG (?"$b v. hipps! 22 hil. 4;nited States v. Arceo ! < hil. 2/ (/<)) >ithout "n "ctu"l c"se co$in #ithin its 8urisdiction! this 'ourt c"nnot in-uire into "ny "lle"tion of r"ve "buse of discretion by the other dep"rt$ents of the overn$ent. +%%%. Alleged violation of polic& to'ards cooperatives . On the other h"nd! the 'ooper"tive Anion of the hilippines ('A)! "fter briefly surveyin the course of leisl"tion! "rues th"t it #"s to "dopt " definite
policy of r"ntin t"x exe$ption to cooper"tives th"t the present 'onstitution e$bodies provisions on cooper"tives. To sub8ect cooper"tives to the +,T #ould therefore be to infrine " constitution"l policy. etitioner cl"i$s th"t in /73! .:. No. 7; #"s pro$ul"ted exe$ptin cooper"tives fro$ the p"y$ent of inco$e t"xes "nd s"les t"xes but in /04! bec"use of the crisis #hich $en"ced the n"tion"l econo$y! this exe$ption #"s #ithdr"#n by .:. No. /;;* th"t in /0h"t .:. No. /;;! L did #"s to #ithdr"# the e7emptions and preferential treatments theretofore granted to private usiness enterprises in general ! in vie# of the econo$ic crisis #hich then beset the n"tion. %t is true th"t "fter .:. No. 20! L2 h"d restored the t"x exe$ptions of cooper"tives in /0
t"x"tionC ch"rit"ble institutions! churches "nd p"rson"es! by re"son of ,rt. +%! L20 (3)! "nd nonstock! nonprofit educ"tion"l institutions by re"son of ,rt. S%+! L4 (3). 'As further round for seekin the inv"lid"tion of &.,. No. 77< is th"t it denies cooper"tives the e-u"l protection of the l"# bec"use electric cooper"tives "re exe$pted fro$ the +,T. The cl"ssific"tion bet#een electric "nd other cooper"tives (f"r$ers cooper"tives! producers cooper"tives! $"rketin cooper"tives! etc.) "pp"rently rests on " conression"l deter$in"tion th"t there is re"ter need to provide che"per electric po#er to "s $"ny people "s possible! especi"lly those livin in the rur"l "re"s! th"n there is to provide the$ #ith other necessities in life. >e c"nnot s"y th"t such cl"ssific"tion is unre"son"ble.
